How to Interpret Auto Insurance Liability Requirements

Auto insurance liability requirements can be listed as three numbers. What does a designation like 25/50/15 mean?

These numbers refer to the amount of liability coverage that a policy provides. This is the protection which covers claims made by the occupants of the other vehicle in an accident for personal injuries and property damage.

The first number represents the level of liability coverage available to pay for injuries and damages claimed by one person following an accident. The second number refers to the level of bodily injury coverage available to compensate two or more people injured in the same accident. The third number indicates the amount of property damage coverage the policyholder has in place.

Bodily injury liability coverage pays for medical bills and rehabilitation expenses incurred by people who have been injured in a car accident. It may also compensate an injured person for economic loss. In some states, bodily injury coverage also pays out on claims for pain and suffering related to an accident.

Property damage liability coverage is used to pay for repairs to the other driver’s vehicle, as well as any public property damaged or destroyed in the accident. In this instance, public property refers to mail boxes, fences, sheds, buildings and guard rails.

Using the example listed here, this policyholder has $25,000 in bodily injury liability coverage to pay for a single accident victim’s injuries and $50,000 to pay for injuries claimed by all people injured in the same accident. This driver also has $15,000 in property damage liability protection in place.